Surplus slip-up indicates need for changes
August 26, 2004
After a budget year fraught with peril that included cutbacks in positions and hours, and consolidation of government agencies, El Dorado county officials discovered they had underestimated the balance of the general fund by about $7.7 million, a mistake that has left many residents scratching their heads. But let’s hold off on the blame game until all the evidence is in.
In creating the budget, El Dorado Chief Administrative officer Laura Gill and county staff had limited information to work with: There’s estimated revenue, affected by growth/decline in the economy. And then there’s California’s budget, which is always late and contains unanticipated items. On both counts, El Dorado worked from assumptions that proved to be incorrect.
California came in late with its budget numbers, and nixed a plan that would have raided county coffers. The change means the state will keep less than anticipated over the next year. With the state budget in negotiations, expected cuts to funding to the counties never materialized.
Gov. Schwarzenegger repealed Gray Davis’ notorious hike in vehicle registration fees. As a result, the county was too conservative on estimates of its potential revenue.
Expenditures in many county departments were less than anticipated. Departments reporting to county accounting officials gave inaccurate inflated numbers.
On the latter count, El Dorado County, in future budgeting efforts, must demand better accounting from its departments. Gill has said the problem will be rectified by creating auditing systems designed to ensure accountability to budget estimates. Because of the incorrect estimate, approximately 300 union employees took a 40-hour leave without pay. Had the numbers been accurate, the layoff may not have been necessary. The county has said it will look at the issue in the future, and the union has said it wants to consider the surplus during future contract negotiations. If it turns out the layoff was not necessary, employees should be compensated.
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While the county continues to suffer budget problems, like most counties throughout the state, the surplus brightens El Dorado’s outlook. For the next budget year, the focus should be on creating a budget that is more accurate. Systematic changes – perhaps pushing back the start of the budget year to give California more time – will help El Dorado County operate more accurately in the future.
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